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Presbyterian Church of Sudan v. Talisman Energy

September 12, 2006

THE PRESBYTERIAN CHURCH OF SUDAN, REV. MATTHEW MATHIAN DEANG, REV. JAMES KOUNG NINREW, NUER COMMUNITY DEVELOPMENT SERVICES IN U.S.A., FATUMA NYAWANG GARBANG, NYOT TOT RIETH, INDIVIDUALLY AND ON BEHALF ON THE ESTATE OF HER HUSBAND JOSEPH THIET MAKUAC, STEPHEN HOTH, STEPHEN KUINA, CHIEF TUNGUAR KUEIGWONG RAT, LUKA AYUOL YOL, THOMAS MALUAL KAP, PUOK BOL MUT, CHIEF PATAI TUT, CHIEF PETER RING PATAI, CHIEF GATLUAK CHIEK JANG, YIEN NYINAR RIEK, AND MORIS BOL MAJOK, AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
TALISMAN ENERGY, INC., AND REPUBLIC OF THE SUDAN, DEFENDANTS.



The opinion of the court was delivered by: Denise Cote, District Judge.

OPINION & ORDER

This case involves the most serious of issues. The plaintiffs have suffered greatly, and in filing this lawsuit they sought to represent all of the non-Muslim Africans who live in and near oil rich lands in the southern Sudan who were injured during six years of the decades-long armed conflict that has gripped the region. They have sued two defendants: the Republic of the Sudan ("Government") and a Canadian corporation, Talisman Energy, Inc. ("Talisman"), for violations of international human rights. Talsiman indirectly held oil interests in the Sudan from October 1998 through March 2003, and its role in oil development in the Sudan and in the regional conflict is at the heart of this lawsuit.

As the litigation has unfolded, it has presented complex issues of international law and the reach of America's Alien Torts Statute ("ATS"), 28 U.S.C. § 1350.*fn1 Talisman has resisted being hauled into an American court to answer charges arising out of events in Africa. The Republic of Sudan has refused to make any appearance in the litigation and is in default.

Now, as the litigation enters its final stages, with summary judgment motions fully briefed and a trial scheduled for January 8, 2007, the critical issue is whether the plaintiffs have gathered sufficient admissible evidence to show that Talisman engaged in any of the violations of international law on which it stands accused by the plaintiffs. More precisely, the plaintiffs seek to hold Talisman liable for having conspired with or aided the Government in committing three crimes recognized under international law: genocide, crimes against humanity, and war crimes. The crime against humanity that is at stake is the widespread and systematic forcible transfer of a civilian population. The war crime is the targeted attacks by the military on civilians.

The plaintiffs have failed to locate admissible evidence that Talisman has violated international law. The hurdles the plaintiffs faced were many since (1) Talisman did not have any operational presence in the Sudan, and the plaintiffs did not sue the affiliate of Talisman that did have a presence in the Sudan and was more directly connected to events there;*fn2 (2) neither the Sudanese government nor the consortium that ran the oil exploration activities in the Sudan cooperated with the plaintiffs, and the plaintiffs' efforts to obtain evidence were severely frustrated; and (3) in any event the challenges of gathering the admissible evidence required to support plaintiffs' case in a desperately poor, distant country engulfed in civil war are significant.

For these and other reasons, in opposition to the summary judgment motion, the plaintiffs have not distinguished between the admissible and inadmissible. The plaintiffs repeatedly describe "Talisman" as having done this or that, when the examination of the sources to which they refer reveals that it is some other entity or an employee of some other company that acted. They assert that this or that event happened, when the documents to which they refer consist of hearsay embedded in more hearsay. Indeed, most of the admissible evidence is either statements made by or to Talisman executives, and the plaintiffs' descriptions of their own injuries, with very little admissible evidence offered to build the links in the chain of causation between the defendant and those injuries.

In recognition of the very serious gaps in their proof, the plaintiffs moved on the eve of the summary judgment practice to reconfigure the legal landscape with a far reaching proposal for amending their complaint. The thrust of the amendment would impose liability on Talisman for the activities of the consortium of oil companies that operated on the ground in the Sudan. This motion to amend, however, is unsupported by the legal or factual analysis that should have accompanied such an untimely and potentially transformative motion.

Talisman has separately moved to preclude plaintiffs from seeking categories of damages not previously identified by the plaintiffs. The motion was made after Talisman received plaintiffs' expert report on damages, which indicated that plaintiffs were seeking to recover categories of damages they had not identified in their Rule 26(a)(1) statements served more than two years earlier.

As the following discussion explains, Talisman is entitled to summary judgment on the claims which the parties have litigated for five years. In addition, the plaintiffs are not entitled to amend their pleading. Talisman's motion to preclude certain categories of damages is denied as moot, as is that part of its motion for summary judgment that addresses plaintiffs' claim for disgorgement of Talisman's revenues from its investment in the Sudan.

The decision to grant summary judgment for Talisman becomes inescapable once the Federal Rules of Evidence and Civil Procedure are applied to the parties' submissions on this motion. It does not reflect a finding that the plaintiffs and their neighbors did not suffer great harms, or that the Republic of Sudan did not engage in gross violations of international law and the norms of civilized behavior. It does not even pass on the wisdom or propriety of Talisman's conduct. Instead, this Opinion addresses an issue that applies to every civil lawsuit filed in this country as it nears trial whether the issues being litigated are relatively mundane or of profound human consequence, as is true here. The issue is whether the plaintiffs have supplied sufficient admissible evidence to proceed to trial on their claims. They have not.

Procedural History*fn3

Plaintiffs filed their class action complaint on November 8, 2001.*fn4 On March 19, 2003, the Honorable Allen G. Schwartz, to whom this case was originally assigned, denied Talisman's motion to dismiss brought on the basis of lack of subject matter jurisdiction, lack of personal jurisdiction, forum non conveniens, international comity, act of state doctrine, political question doctrine, failure to join necessary and indispensable parties and equity considerations. Presbyterian Church of the Sudan v. Talisman Energy, Inc., 244 F. Supp. 2d 289 (2003) ("2003 Opinion").*fn5 This action was assigned to this Court on April 16, 2003. On June 13, 2003, a Scheduling Order set the dates for motion practice and established that fact discovery would close on March 25, 2005. During the discovery period, the parties deposed ninety-five witnesses.

An Opinion of March 25, 2005 denied plaintiffs' motion for certification of a class. Presbyterian Church of the Sudan v. Talisman Energy, Inc., 226 F.R.D. 456 (S.D.N.Y. 2005). Plaintiffs' second motion for certification, with a narrower class definition, was denied in an Opinion of September 20, 2005. Presbyterian Church of the Sudan v. Talisman Energy, Inc., 01 Civ. 9882 (DLC), 2005 WL 2278076 (S.D.N.Y. Sept. 20, 2005).

Between the plaintiffs' two motions for class certification, Talisman moved for judgment on the pleadings based on the Supreme Court's decision in Sosa v. Alvarez-Machain, 542 U.S. 692 (2004), and the Second Circuit's decision in Flores v. Southern Peru Copper Corp., 406 F.3d 65 (2d Cir. 2003). Talisman claimed that the standards articulated in those two opinions made the 2003 Opinion's decision to recognize corporate and secondary liability under the ATS clearly erroneous. Talisman's motion was rejected in an Opinion dated June 13, 2005. Presbyterian Church of the Sudan v. Talisman Energy, Inc., 374 F. Supp. 2d 331, 332 (S.D.N.Y. 2005).

In the Fall of 2005 a trial date was set for January 8, 2007. Talisman moved for summary judgment on April 28, 2006. On the same day that Talisman moved for summary judgment, each side moved to preclude testimony from opposing expert witnesses. Talisman moved against seven expert witnesses offered by the plaintiffs: Gaspar Biro, Douglas Johnson ("Johnson"), Salem Mezhoud, Ronald Vollmar, James Levinsohn, Sherwood Goldberg ("Goldberg"), and Sharon Hutchinson. The plaintiffs moved against four of Talisman's experts: Peter Bechtold, Andrew Buchanan, Aidan Davy and Emery Brusset.

Plaintiffs' opposition to Talisman's summary judgment motion was filed on May 26, 2006. Their papers included a memorandum of law, a thirty page response to Talisman's Rule 56.1 statement of material undisputed facts ("Responsive Statement"), a seventy-two page additional statement of material disputed facts ("Additional Statement"), and two sets of exhibits. One set contained seventy-one exhibits*fn6 in two volumes. The second set contained one hundred and seventeen exhibits in ten volumes.*fn7

Despite the volume of plaintiffs' evidence, their arguments rest on a dozen or so pieces of evidence to which they refer repeatedly. Those pieces of evidence include excerpts from three depositions: James Buckee ("Buckee"), Talisman's CEO; Ralph Capeling ("Capeling") the general manager of Talisman (Greater Nile) B.V. or TGNBV, Talisman's indirect subsidiary which held Talisman's interests in the Sudan; and Mark Reading ("Reading"), a security advisor employed by TGNBV. Plaintiffs rely as well on a handful of TGNBV documents and several documents which appear to have been generated by Talisman itself. Many of these documents appear to contain hearsay, including reports about events witnessed by others. Some of the plaintiffs' most striking accusations against Talisman are drawn from affidavits prepared by Ian Taylor ("Taylor") for litigation against Talisman in Canada. Taylor was never deposed, is now deceased, and his affidavits are inadmissible.

On April 12, 2006, just two weeks before the summary judgment motion was filed, the plaintiffs filed a motion to amend their complaint. The complaint on which the parties conducted discovery was the Second Amended Complaint, filed on August 18, 2003 ("2003 Complaint"). The proposed Third Amended Complaint shall be referred to as the 2006 Complaint. The motion to amend is addressed after the discussion of the summary judgment motion.

Background

The following facts are undisputed, or taken in the light most favorable to the plaintiffs, unless otherwise noted. In order to describe as fairly as possible the evidence the plaintiffs present, the description of events that follows is largely taken from the documents on which the plaintiffs have placed the greatest reliance, without a careful analysis of the admissibility of this evidence. It should be borne in mind that the plaintiffs have not yet shown that a percipient witness is available to testify to many of the events that are described below.

A. The Conflict in the Sudan

The recent history of the Sudan has been described several times in this litigation. See Presbyterian Church, 226 F.R.D. at 461-63; Presbyterian Church, 244 F. Supp. 2d at 296-99. Because that history provides context to the issues presented in Talisman's motion for summary judgment, it is summarized here.

Sudan is the largest country in Africa and has a population of approximately 41 million. The population in the North is predominately Arab and Muslim, while the population in the South is largely non-Muslim and African. The two largest ethnic groups in southern Sudan are the Dinka and Nuer. A map showing the boundaries of the Sudan follows:

[Editor's Note: Map Unavailable]

Since gaining its independence in 1956, the Sudan has suffered through two long periods of civil war fueled by the struggle between the Government, which is Arab-dominated and based in the North, and rebels based in the South. The second, more recent civil war began in 1983, and was initially a struggle against the Government waged by the Sudan People's Liberation Army ("SPLA") led by John Garang ("Garang"). In 1991, the SPLA split into competing factions. From 1991 to 1997, those factions fought each other, as well as the Government.

In April 1997, the Government, and major rebel groups with the exception of the SPLA, signed the Khartoum Peace Agreement ("Khartoum Agreement"). As part of the agreement the rebel groups became the Southern Sudanese Defense Force ("SSDF") and entered into a partnership with the Government. Beginning in 1998, the SSDF split apart as senior military commanders left and formed their own militia groups. Some of the militia groups that were formed out of the SSDF were funded by the Government. By the end of 2000, the Khartoum Agreement had collapsed and fighting broke out again in the South among militia groups, as well as between militia groups and the Government. It is undisputed that during the time that Talisman was involved with the Sudan, southern Sudan was the site of increasing levels of violent conflict among a number of armed groups.

B. Oil Development in Southern Sudan Before 1996

After oil was discovered by Chevron in southern Sudan in 1979, the Government granted concessions to explore and extract oil in this region by dividing territory into numbered "blocks." The Sudan is made up of twenty-six states, and the oil concessions relevant to this litigation are spread among five of them: Unity (also referred to as Western Upper Nile), Western Kordofan, Northern Bahr el Ghazal, Jonglei, and Warab.*fn8

Block 1, or the Unity oilfield, is north of the town of Bentiu and is now the southern terminus of the Sudan oil pipeline ("Pipeline"), which runs to the Red Sea in northeast Sudan. Block 1 is the only one of the three blocks that is located entirely within Unity State. Block 2, or the Heglig oilfield, is northwest of and adjacent to Block 1. Block 2 is mostly located in Western Kordofan State. Block 4, or the Kaikang oilfield, is a large block to the south and west of Blocks 1 and 2 and is primarily located in Western Kordofan, Northern Bahr el Ghazal and Unity States. The Government also designated Block 5A, which figures prominently in this litigation. Block 5A abuts a portion of the eastern borders of Blocks 1 and 4, and is primarily located in Unity State, but also touches Jonglei, and Warab.

The maps that follow show the geography of the relevant states and the boundaries of the oil concession:

[Editor's Note: Maps Unavailable]

On August 29, 1993, State Petroleum Company ("SPC"), a Canadian company, purchased the rights to Blocks 1, 2, and 4 and entered into a production sharing agreement with the Government to develop these blocks exclusively. From 1993 to 1996, SPC was the only oil company operating in Blocks 1, 2 and 4. The total area of these blocks consisted of 130,000 acres of "developed" land with proven oil reserves, and nearly 12 million acres of "undeveloped" land with no proven oil reserves.

In May 1994, Arakis Energy Corporation ("Arakis"), a Canadian corporation, acquired SPC, which became a wholly owned subsidiary of Arakis. In 1996, the Government attempted to terminate SPC's concession rights, alleging that SPC had failed to perform drilling and production activities under the production sharing agreement. In reaction, SPC began to look for partners to build a consortium that could increase production levels. It found several.

C. Consortium

On November 29, 1996, China National Petroleum Corporation ("CNPC"), Petronas Carigali Overseas SDN BHD ("Petronas"), and Sudapet Ltd. ("Sudapet") joined with SPC (collectively "Consortium Members") to establish a consortium to conduct oil exploration in the Sudan and to construct, own and operate the Pipeline. All of the Consortium Members except for SPC are wholly owned by governments: China, Malaysia, and the Republic of Sudan, respectively. An interim agreement between the Consortium Members became effective on November 29, 1996 ("Interim Agreement"). On February 28, 1997, they entered into the Consortium Agreement ("Consortium Agreement"), which updated the Interim Agreement.

In addition to these two documents, the consortium's activities are governed by two other sets of agreements. One set covers the relationship between the Consortium Members and the Government and relates to the three separate but related projects undertaken by the Consortium Members. The oil operations conducted in Blocks 1, 2 and 4 are governed by the Exploration and Production Sharing Agreement ("EPSA"); the construction and operation of the Pipeline is governed by the Crude Oil Pipeline Agreement ("COPA"); and the rights to use the land on which the Pipeline is constructed is governed by the Surface Lease Agreement ("Surface Agreement").

A second set of agreements governs the relationship among the Consortium Members and their conduct of the projects undertaken by the consortium. The Joint Operating Agreement ("JOA") covers oil exploration, production, and development in Blocks 1, 2 and 4. The Joint Construction and Operating Agreement ("JCOA") covers the construction and operation of the Pipeline.

The Consortium Members established the Greater Nile Petroleum Operating Company Limited ("GNPOC") as the entity which would conduct operations for the Consortium Members under their agreements with the Government.*fn9 Both the JOA and the JCOA identify GNPOC as an independent contractor. The JOA, JCOA, EPSA and COPA will be referred to collectively as the "GNPOC Project Agreements." The shares of GNPOC were 40% owned by CNPC, 30% owned by Petronas, 25% owned by SPC and 5% owned by Sudapet. Thus, the Canadian company owned one-quarter of GNPOC.

D. Lundin Oil

In 1998, Lundin Oil AB ("Lundin Oil"), a Swedish company, obtained the rights to explore for and produce oil in Block 5A. Lundin Oil conveyed its interests in Block 5A to Lundin Petroleum AB ("Lundin Petroleum"), an affiliated Swedish company, in 2001. Lundin Petroleum sold its interests in Block 5A in April 2003. Lundin Oil and Lundin Petroleum shall be referred to collectively as Lundin. During its period as the operator, Lundin constructed and maintained roads within Block 5A. Lundin's interests in the Sudan were held through several subsidiaries including International Petroleum Corporation ("IPC") and many documents on which the plaintiffs rely refer to interactions between GNPOC and IPC.

E. Talisman's Acquisition of Arakis

Talisman, headquartered in Calgary, Alberta, is an oil and gas exploration and production company with global operations. Talisman's international assets are generally held by subsidiaries. In October 1998, during a period of hope created by the Khartoum Agreement, Talisman acquired Arakis. Prior to acquiring Arakis, senior Talisman officials traveled to the Sudan to conduct due diligence. While in the Sudan the Talisman officials met with Government officials including Rick Machar ("Machar"), then the First Assistant to the President of the Sudan and the head of the Southern Sudan Coordinating Council ("SSCC"). The SSCC was a political body established by the Khartoum Agreement to serve a coordinating and supervisory role in the southern Sudan and to serve as link between the South and the Government.*fn10

The Talisman officials visited several GNPOC sites, and spoke with representatives of the British government in the Sudan about the political and security situation. From 1898 through 1956, Sudan had been a British-Egyptian condominium. Talisman commissioned two independent reports concerning the security and political situation in the Sudan.

Through these efforts, Talisman learned that GNPOC had an agreement with the Sudanese Army that it would provide security for the GNPOC oil operations and that GNPOC security advisors had daily contact with the Sudanese Army. Robert Norton ("Norton"), who had served as the head of security for Arakis in the Sudan from 1994 to 1998, told Talisman's Buckee and Talisman Vice President Mary Sheppard ("Sheppard") in September 1998 during a "roundtable" meeting held in Canada concerning Canada's relationship with Sudan, that the Government used not just its military but also Government-sponsored militia to protect GNPOC oil fields. Norton also expressed his opinion that Talisman's presence in the Sudan would make oil exploration in the Sudan successful, and that that would increase Government oil revenues and tip the military balance in the Sudan in favor of the Government.*fn11

One of the attendees at the roundtable was Melville Middleton ("Middleton"), a Canadian associated with Freedom Quest International. Middleton asked whether Talisman had contacted groups with knowledge of human rights violations by the Government, and was told by Sheppard that the Government had informed Talisman that "the deal was off" if Talisman talked to the "other side." Middleton advised Sheppard, Buckee, and other Talisman officials at the roundtable that GNPOC and the Government were using the Sudanese military to evict civilian inhabitants forcibly and create a "cordon sanitaire" around existing oil fields. Middleton opined in that conversation that the Government would use oil revenues to buy weapons and fund militias to further the Government's "genocidal policies."

One of the two independent studies commissioned by Talisman was by a security consultant, Control Risks Group.*fn12 An April 1998 report prepared by Control Risks Group ("Moss Report") described three roles for the Sudanese military in protecting GNPOC operations as: "[a]rea domination", "[m]ilitary protection teams for key assets," and "[a]rmed escorts for road travel during hours of darkness." The Moss Report concluded that the presence of army units "creates a substantial deterrent to rebels, bandits or criminals."

At his deposition, Buckee explained that Talisman acquired Arakis because the opportunity to explore for and produce oil in the Sudan was a "technically" good project with attractive terms, and because Talisman thought it could do some good in a very poor country, including potentially serving as a catalyst for peace. In the period leading up to the acquisition, Arakis was having difficulty meeting its financial obligations to GNPOC. Talisman provided over $46 million in cash to Arakis through a credit arrangement so that it could meet those obligations.

After acquiring Arakis, Talisman formed a Sudan Steering Committee ("Steering Committee") comprised of senior-level Talisman officials that met on a weekly basis to address non-operational matters relating to Talisman's investment in the Sudan, including public relations, community development and security. The Steering Committee included Buckee; Vice-Presidents Talisman Vice President Nigel Hares ("Hares") and Sheppard; and Reg Manhas, who served as Talisman's head of Corporate Social Responsibility.

F. TGNBV

After it acquired Arakis, Talisman transferred the interests that Arakis had held in GNPOC and in the GNPOC Project Agreements to State Petroleum Corporation B.V., an indirect subsidiary of Talisman, which was renamed Talisman (Greater Nile) B.V. or TGNBV on December 10, 1998. TGNBV was a wholly-owned subsidiary of Goal Olie-en-Gasexploratie B.V. ("Goal Olie"). In the period that it owned TGNBV, Goal Olie was wholly owned by two English companies, first Supertest Petroleum (U.K.) Limited ("Supertest") and then Igniteserve Limited ("Ingniteserve").*fn13 Both Supertest and Igniteserve were wholly owned by Talisman Energy (UK) Limited ("Talisman UK"). Talisman UK was a direct and wholly-owned subsidiary of Talisman. On March 12, 2003, Talisman and Goal Olie sold TGNBV to ONGC Videsh Ltd., an Indian oil and gas company. With that sale, Talisman's investment in oil development in the Sudan ended.

The relationship between Talisman and TGNBV was structured through an agreement called a TASA. Under the TASA, Talisman provided advice to TGNBV on oil operations in the Sudan, including advice on topics such as security, development, and managing the relationship with the Government. For its part, TGNBV sent TASA requests to Talisman, principally on business and operational issues. These requests were usually made by Capeling, TGNBV's General Manager.

Talisman also provided TGNBV with employees, including Capeling, through a practice called secondment. Secondment refers to the assignment of an individual from one of Talisman's companies to another for a defined period of time, usually in the range of two to three years.*fn14 Capeling reviewed the compensation of seconded employees, their job performance, and the continued need for their positions. The seconded TGNBV employees also reported to GNPOC line managers.

TGNBV did not actually conduct any oil operations in the Sudan; oil exploration and production work was performed by GNPOC. Of particular importance to the issues in this litigation, however, TGNBV's staff included two security advisors, Mark Dingley ("Dingley") and Mark Reading ("Reading"). Reading is a retired British soldier. These two men traveled widely through the GNPOC concession and neighboring areas and were the principal liaison with Mohammed Mohktar ("Mohktar"), the head of GNPOC security. They prepared periodic reports assessing the danger presented to TGNBV employees working in the GNPOC concession and the threat to the GNPOC oil operations. The reports were sent to "key personnel" in TGNBV and sometimes also went to senior Talisman officials, "depending on the nature of the report." The plaintiffs rely heavily on three documents authored by Dingley and Reading, and on their deposition of Reading.

G. GNPOC Security Arrangements: 1999 to 2003

During the period 1999 to 2003, the Government was heavily engaged in providing security for the GNPOC concession. The Government commitment included about 1,000 military and police officers assigned to protect the oilfield operations themselves; about 1,300 intelligence officers who worked to gather intelligence in the communities within the concession; and about 5,000 military personnel who were stationed in the concession. These Sudanese security forces were under the control of Sudan's Security Council, which was headed by Sudan's Minister of Mines and Energy.

GNPOC had its own security force, which was unarmed and which served as a liaison with the Government forces. From 2000 through 2003, Mohktar was the head of GNPOC security.

H. Logistical Support of the Military

In October 2000, Talisman and TGNBV worked on drafting guidelines for GNPOC's interaction with and support of the military forces in the concession area. The guidelines listed acceptable and unacceptable services and supplies, drawing a distinction between support for the Government's defense of GNPOC oil exploration activities and any offensive military action. For example, the proposal allowed GNPOC to share its communications facilities (radios, fax), to provide accommodations at GNPOC rig and facility sites and at checkpoints in the concession area, to repair non-combat vehicles, and to give emergency medical treatment. Two types of services categorized as "unacceptable" were allowing the military to fill fuel barrels to be taken to strategic locations and to use GNPOC vehicles since GNPOC would have "no control" over how the fuel or vehicles were ultimately used.

Although not everyone within GNPOC believed that it increased the security of GNPOC employees, it was not uncommon for soldiers to ride in GNPOC trucks that delivered employees to well sites. At one point, GNPOC protested the practice and the military agreed that soldiers would patrol the oil field every night instead. A GNPOC contractor once witnessed soldiers "going to the battle" being transported in GNPOC trucks. Sudanese military officers were also allowed to fly on GNPOC flights.

In May 1999, GNPOC, the Government and IPC built two all-weather roads: one linking the Unity camp to Rubkona and one linking El Toor, an oilfield in Block 1, to Fariang. Both Rubkona and Fariang had army bases and the roads were considered important to the security of the oilfield. GNPOC also constructed a ring road around the Unity camp.

I. "Buffer Zone" Strategy

As part of the strategy for protecting the oil field operations, Sudanese forces cleared key areas of villagers. According to Tabai Deng Gai ("Gai"), a former governor of Unity State, between the signing of the Khartoum Peace Agreement in 1997 and May 1999, the Sudanese military opened garrisons in the GNPOC concession area for defense of the oil operations. When a garrison was established, local police forces were expelled and villages were destroyed. Gai testified that he was aware of but had not seen an agreement between the Government and "Talisman" to protect oil operations and pipeline construction, and that pursuant to the agreement, the Government forced people to leave villages by attacking the villages with any means necessary, including small arms fire, artillery, helicopter gunships and bombers.*fn15 Gai explained that "it is an affair between the Sudanese army, the Arafiah (?) militia, the Talisman and their agreement entails that bridges have to be destroyed, people have to be displaced, people have to be killed if they do not want to go." (Question mark included in transcript.) Kwong Danhier Gatluak ("Gatluak") was chief of military intelligence for the SSDF from 1991 to 1999 and chief of military intelligence for the Sudan People's Defense Force ("SPDF") from 1999 to 2002.*fn16

Danhier testified that between 1997 and 2003, the Government forces routinely attacked undefended civilian villages in the GNPOC oil concession to clear the area for oil exploration.*fn17

While it is unclear how much of Gai's and Danhier's testimony is based on personal knowledge, a report written by Dingley in 1999 confirms the existence of a "buffer zone" strategy, at least on a small scale. It reads:

The military strategy, driven it appears by the GNPOC security management, is to create a buffer zone, i.e. an area surrounding both Heglig and Unity camps inside which no local settlements or commerce is allowed. This has been achieved with the exception of all but a few nomadic family tents, and extends to approximately 8kms around Heglig and 5kms around Unity. The advantage of this buffer zone is that it allows for easier control of movement in the vicinity. (Emphasis supplied.)

A report released in January 2000 by John Harker ("Harker Report") on behalf of the Canadian government provides further evidence of displacement.*fn18 The Harker Report relates that between April and June 1999, the population of Ruweng County had declined by 50%, which it attributed primarily to oil development. Ruweng County is located in Block 1.*fn19 The report noted, however, that the displacement was "more or less complete by the time Talisman arrived on the scene" but that it had continued during the time of Talisman's involvement. Separately, at a meeting in Khartoum, Machar, then head of the SSCC, informed Buckee that "400,000 people had been displaced" in the Sudan.*fn20

A June 2002 TGNBV security report describes the "buffer zone" around Heglig camp:

The focus will return to the ring road at Heglig. The remaining nomads (from the north) are being "encouraged" to complete their move through the area as soon as possible. The area within the security ring road while not a sterile area as found on security operations elsewhere (eg [sic] Algeria) is moving in that direction. Heglig Market has completed its first season out of the area (it was moved this year to the outside of the ring road). This step up in security with-in the ring road I believe is a good thing, it is partly in response to cattle raiding activities as witnessed last week when shots were fired close to Heglig in the early hours.

J. The Airstrips

There were three airstrips within the GNPOC concession area, two of which were controlled and maintained by GNPOC.*fn21 GNPOC's two airstrips are referred to as the Unity airstrip and the Heglig airstrip.*fn22 GNPOC used the airstrips to support its activities within the concession. The two GNPOC airstrips were also used by the Sudanese military to provision their troops, and on occasion for defensive military activities. For at least some period of time, each of these airstrips was also a base for attacks against rebel forces and, the plaintiffs contend, against civilians including nine of the plaintiffs. GNPOC and military aircraft operating at the airstrips shared the same fuel tanks, and GNPOC occasionally allowed military aircraft to use GNPOC fuel.*fn23

The Heglig airstrip was used extensively by the military. As of 2000, a dozen military flights came into the Heglig airstrip each week to supply Government security forces.

Of greatest concern for this litigation, the Heglig airstrip was also used by Government forces as a staging area for combat operations. A November 1999 TGNBV security report describes baggage trolleys being used to move ordinance around the airfield and Antonov cargo planes that had been converted for use as bombers being loaded with bombs weighing perhaps as much as 500 pounds. According to a TGNBV security officer, the use of the Heglig airstrip made sense for the Antonovs because it was "much closer to the area that they were bombing" than any other airstrip.

The Harker Report describes the use of the Heglig airstrip by military aircraft: "flights clearly linked to the oil war have been a regular feature of life at Heglig airstrip." The report contends that the facility had been used by "helicopter gunships & Antonov bombers of the [Government]. These have armed and refuelled [sic] at Heglig and from there attacked civilians."*fn24

Talisman, and in particular its CEO Buckee, initially opposed the Government's use of the airstrips for its helicopter gunships or combat operations. It felt that such operations would draw rebel attacks on the airfields and thus posed a significant threat to the safety of TGNBV and GNPOC personnel. Talisman's objections were occasionally successful: a TGNBV report in January 2000 described a string of objections made in November and December 1999 and stated that "[m]ilitary use of the Heglig airstrip has not been observed since December 1999." By June 2000, however, combat operations had resumed. TGNBV security reports describe helicopters and Antanov bombers in June 2000, and Antanov bombers flying runs "around the clock" in October 2000.

The written proposals for moving the Government combat operations away from the Heglig airstrip included a January 2000 TGNBV suggestion that the military be asked to move to the Unity airstrip and a May 2000 suggestion that Talisman secretly pay for a helicopter gunship base and airfield within the GNPOC oil concession area. There is no evidence that such a base was ever constructed or that this idea was ever pursued further. Indeed, Buckee testified that the idea was "immediately rejected as being a very silly idea."

The Unity airstrip began as just a dirt stip that was not used with any frequency until it was upgraded in approximately 2000. By 2001, the Sudanese military was using the Unity airstrip as well as an airfield for its helicopter gunships.

A TGNBV security report from a meeting with GNPOC's Mohktar in May 2001, indicates that Mohktar was not willing to ask the military to move from Unity to Rubkona at that time despite a personal request by Buckee just two weeks earlier that the military cease using the Unity airstrip.*fn25 Mohktar felt that the military helicopters were a "key" component in the Government's strategy for dealing with "Gadet"*fn26 and that its operations "could not continue without them." Rubkona was not an attractive alternative in Mohktar's view since it was less secure, with too many rebel sympathizers in the vicinity. An email from Reading to the Talisman Sudan Steering Committee described Unity as "an excellent location" from the Government's point of view because it allowed them to support operations in a variety of important areas without requiring the helicopters to carry extra fuel.

The same TGNBV document from January 2000 describes a series of conversations with Mohammed Khalifa Hussein, a GNPOC employee, about the use of Heglig for bombing attacks. The report indicates that Khalifa received a promise that the practice would stop, but that it soon resumed. This account is consistent with a TGNBV security report that suggests transferring the Unity airstrip to the Sudanese military, in part because of TGNBV's inability to control its use:

My personal view is that some thought should be given to turning over Unity Airstrip to the military in an official capacity, I struggle to see any alternative other than the present line of "defensive only" operations.*fn27 I think it is time to accept that they will not move to Rubkona in the forseeable future (still a longer-term aim) and that the military will not build their own facilities. They (government) have strung this along this far and I think they will continue to do that despite on occasions telling us what we want to hear. This I feel is the reality of the situation. (Emphasis supplied.)

TGNBV security reports reflect ambivalence about the presence of the helicopter gunships at the GNPOC airstrips, noting that they did provide defense for the GNPOC operations, but that the consortium could not monitor or control what they did once they were in the air. It is worth quoting a May 2001 TGNBV security report in some detail:

[T]hese are the weapons of choice for this type of warfare. They are ideal for the area and terrain in which they have to operate. From a purely pragmatic point of view they offer great depth and defence of the oil operation in Block 4 and in the future south of the river. They provide legitimate defence of the oil assets and from a military point of view are a necessity due to the risk and high threat assessment. The problem from our perspective is that although we can repeatedly say all that, when they are away from the oil area who really knows what they do? There is absolutely no way of monitoring. To suggest such a thing would be a disaster and impractical and in their [the Government's] defence many of the other companies are calling for a more "robust" attitude to the security threat in Block 4 and elsewhere. I'm sorry to be the bearer of bad news... this problem will not go away no matter how many security protocols etc. are signed.

The only improvement to the current situation would be at a higher level to get the gunships to operate out of Rubkona or have the military have their own purpose built facilities. Both of those suggestions are fraught with difficulties, in the fact that would oil money build the facilities (?) and even if the gunships move to Rubkona, it is still an oil facility and is sited in the GNPOC concession. (Emphasis supplied.) (Question mark in original.) The report also noted that the dual use of the airstrip was not unique to GNPOC. It recited that

Many other airports in Sudan have dual roles, El Obeid is a classic case where the [UN/World Food Program] planes operate from, and this is done alongside [Government] offensive operations. When picking up Ambassadors this week it was plain to see 'ordnance' [sic] in close proximity to aid planes.

After a rebel rocket attack on the Heglig facility in August 2001, Buckee revised his assessment of the level of the threat to GNPOC facilities and dropped his objections to the presence of the helicopter gunships at the Heglig airstrip. The rebels had fired 13 rockets from eight to twelve kilometers away from the facility. At that point, Capeling and the TGNBV security advisors also came to believe that the presence of helicopter gunships at Heglig would assist in the protection of the GNPOC oil facilities since the helicopters were useful in conducting "reconnaissance." Capeling sent a letter to the Government after the attack on Heglig emphasizing the importance of securing the safety of the people working for GNPOC.

Buckee also expressed concern about Government air attacks that were not directly related to the airstrips. He wrote to Major General Bakri Hassan Saleh, Minister of National Defense for the Government of Sudan, on February 12, 2001, to protest bombings by the Government in the South. The letter states that "Talisman has no capacity to verify reports of bombing, as the alleged incidents are occurring well outside our area of operations" but cautions that whatever "the military objectives may be, the bombings are universally construed as violations of international humanitarian law." Buckee urged Saleh to "stop any bombing that has a chance of inflicting damage on civilians."

On February 20, 2002, military aircraft attacked a World Food Program site at Bieh, a town in Block 5A that a TGNBV security report described as "effectively a no-go area" for the Government. A TGNBV security advisor wrote in a March 5, 2002 report about the incident that it was "reasonable to assume that the ...


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